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B.C. to lift foreign buyers tax for those with work permits


British Columbia will soon allow international citizens working and paying taxes in the province to bypass the 15-per-cent foreign home buyer’s tax in a bid to make the province more attractive to skilled professionals.

Premier Christy Clark announced the coming move Sunday after being asked about U.S. President Donald Trump’s highly controversial ban on certain Muslim immigrants.

“We believe the best and the brightest should be able to come to British Columbia,” she told reporters during a short media scrum as Vancouver’s Chinese New Year parade was starting.

 

“We’re going to lift the foreign owners’ tax on people who have work permits, who are paying taxes and living in British Columbia, as a way to encourage more people to come.”

Ben Chin, the Premier’s head of communications and issues management, said that Ms. Clark had asked British Columbia’s Finance Minister a little while ago to begin looking at lifting the levy for international buyers working. Mr. Chin said the exact details of the exemption have not yet been finalized, but the changes will soon be enacted through a provincial order in council.

He added that there is no plan to extend the tax beyond the 22 communities it currently affects and into Greater Victoria, which Canada’s housing agency recently singled out as an area experiencing a dangerous surge in home prices.

Tom Davidoff, an economist at the University of British Columbia, welcomed the province tying the tax exemption to someone’s work permit – a federal document that is hard to forge. But he worried there could be a massive loophole if foreign buyers were allowed to duck the tax by paying nominal amounts of provincial income tax on their global wealth. He added that the new exemption should not lead to a new spike in foreigners buying in Metro Vancouver’s lagging market because relatively few people are on work permits.

The latest provincial government data showed that foreign citizens edged back into Metro Vancouver’s flagging real estate market months after the province introduced the 15-per-cent tax at the beginning of August, but the percentage of buyers who are not Canadians or permanent residents is still well below the double-digit rates seen before the new tax hit the sector.

In and around Vancouver, foreign citizens were involved in 4.1 per cent of all homes bought in November, up from 3 per cent the month before and more than quadruple the near-zero rate recorded in the month after the province launched the levy.

Mr. Chin said this new exemption – which is similar to alternative proposals from the Opposition New Democrats and a group of more than 40 other local economists led by Prof. Davidoff – is coming because the B.C. Liberal government is narrowing its focus after creating the much broader tax.

“Now that we’ve had a pretty good half-year’s worth of data, we can make a move to encourage and continue to attract people that can add to our economy,” he said.

Vancouver MLA David Eby, the NDP’s critic for housing, said in failing to make this exemption at the beginning, the province brought seven months of unnecessary hardship for employers trying to recruit foreign talent already weary of the region’s unaffordable housing.

“The weird thing was we were taxing the workers who wanted to come and help build our province and we weren’t taxing all the speculators who got their money into the market before the foreign-buyer tax was proposed,” he said.

By exempting foreign buyers who are working in and around Vancouver, the Premier has now implemented half of the NDP’s original proposal to zero in on foreign capital – not citizens, Mr. Eby said.

“Now she needs to impose the additional property taxes on people who buy homes here, but who don’t pay provincial income tax here and haven’t been paying provincial income tax here.”

 

source: Globe and Mail



The Vancouver real estate s%&* show


Assessments are out, sales are down, what’s happening with prices? Sellers aren’t panicking. Yet. But the potential for chaos in the market hasn’t been this high in recent memory. So what’s next?

Last August, the BC government was finally browbeaten into cracking down on real estate purchases made by foreign buyers — purchases that had been blamed for artificially inflating Vancouver’s real estate sector. A 15% tax on the total purchase price of a property is now being levied on overseas and U.S. investors, but the tax has been applied retroactively! Anyone who was under contract to buy a home before August 2nd, but who completed the transaction after August 2nd, would have been spanked by this additional 15% fee. Anyone caught out by this unanticipated expense, and who realized with dismay that they couldn’t afford it, risked both the loss of their deposit and the possibility of legal reprisals by the spurned seller. Here’s what the seers and sages in the provincial government failed to anticipate: Yes, the tax has dissuaded wealthy foreigners from property-flipping, or from parking their cash, as it were, in buildings that stay empty most of the year. But it has presented a punishing array of problems to the very people it was designed to protect.

Consider this representative mini-catastrophe. A longtime home-owner on Vancouver’s west side has decided it’s time to downsize and cash in on his retirement fund (i.e. his real estate investment, his own home). He agrees to sell his house for a large sum to a prospective foreign buyer, and subsequently enters into another contract to buy a beautiful condominium. This harmonious arrangement is obliterated by the arrival of the August 2nd tax — a measure introduced with little warning and seemingly minimal input solicited from realtors or the public. Mayhem ensues. The would-be buyer feels ambushed by this newly disclosed charge, and reneges on the deal — disappearing back into his own country where he’s safe from any repercussions. The seller, having been denied the large sum he was expecting, has no choice but to pull out of his own obligation to purchase the condo, and gets his ass sued off by that justifiably enraged party. The two are enmired in a lawsuit for months, at great expense. Who, then, was really affected by this tax, locals or foreigners?

The problems produced by this impromptu scheme are compounded by another development. Shortly after this provincial tax was introduced to “make real estate more affordable for locals,” the federal government, perversely, decided to make qualifying for a mortgage even harder. Determined to keep Canadians’ debt levels down and prevent the slew of foreclosures we’ve seen in the U.S., the Powers That Be have implemented a new set of criteria for borrowers, and once again people have had mere weeks to scramble and adjust to the new reality. Buyers now have to pass a “stress test,” and technically qualify for mortgages with interest rates almost double those that are presently on offer from the banks — a demonstration, essentially, that they could continue to make payments when rates actually do rise. They groan with frustration as they pay for the sins of those who came before.

And then, into this admixture of confused and competing measures comes yet another development. The government begins to offer interest-free loans to first-time buyers, with no payments due for five years. Do you have up to $37,500 saved to plunk down on a home? The government, in its munificence, will match it — a pleasing development, you might think, until you realize how much debt you’ve been plunged into. Five years later, like an agitated mafioso, they’ll want their money back — and in the meantime, as experts predict, interest rates will have been slithering upwards . . .

How this shitshow is going to end is anyone’s guess, but I’ve got a front row seat and the curtains are about to part for the next act.



New mortgage rules that may affect you


Canadians applying for a mortgage that requires CMHC insurance will have to qualify under higher interest rates under a new “stress test” announced October 3 by federal finance minister Bill Morneau.

The tougher mortgage rules were announced as part of a wider series of "preventative measures" aimed at “ensuring the long-term stability of the market” and reducing risk, according to Morneau.

Under the proposed new mortgage qualification rules, the current “stress test” that currently applies to some insured, variable-rate mortgages and insured mortgages with terms of less than five years will be applied to all new applications for insured mortgages, as of October 17.

The stress test requires that, even if an applicant can achieve a discounted mortgage rate of 2.79 per cent, for example, they will have to qualify as if they would have to pay the full Bank of Canada posted rate, currently 4.64 per cent.

This new measure will now include all new applicants for insured, fixed-rate mortgages with terms of five years and more, who previously only had to qualify under the discounted interest rate they would actually be paying – which had typically allowed those applicants to qualify for much larger loans than will be possible under the new proposal.

Homeowners that have an existing insured mortgage or those renewing existing insured mortgages will not be affected by this measure. Applicants for uninsured mortgages (those with a down payment of more than 20 per cent) are also not affected.

Mortgage expert Alisa Aragon, a broker with Dominion Lending Centres Mountain View, told REW.ca, “This new measure is going to take so many people out of the market, especially in Vancouver with our high home prices. A lot of people have less than 20 per cent down payment, and a lot of them don’t go for variable or short-term rates because they don’t qualify under the stress test, so they go for fixed-term rates which allows them to qualify under the discounted contract rate. Now if they have to qualify under the posted rate, they will qualify for a much lower mortgage and that could take them out of the market.

“I have a couple that is looking at homes around $630,000 and I have them qualified at the five-year contract rate. Now with the new rules coming into effect, they are going to qualify for a property of $504,000. That is a huge difference and that could mean the difference between buying a house or a condo.”



Headshot updating


Have you ever seen a photo of a realtor so out of date it could be their child?  That's the first warning sign they might not be up with current trends and marketing techniques.  The Matt Pozer Real Estate Group is always looking for ways to stay ahead of the curve.  Today we updated our photos again with a really fun photographer.  We really liked how he took the time to teach us how to take a better photo.  This rings true with real estate.  Professionals really do stand out from the crowd.

 

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We've made an incredible change!


We were going to hold of for a bit longer before we let the cat out of the bag but Jordan just couldn't wait.  We have made the change to Oakwyn Realty.  Oakwyn is a group of like minded incredibly bright and creative realtors changing the way real estate is done here in Vancouver.  We will have more updates soon but here is a photo of Jordan loving life here at Oakwyn

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We had a very busy week in Vancouver and Burnaby Real Estate


This past week we listed a 2 bedroom 2 bathroom condo in the Edmonds area of Burnaby East.  We knew the market was very active in this area so we priced it sharply to get the most buyers in to see it.  In this market buyers all have their poker faces on.  Not much emotion or excitement coming from any buyers as they viewed the property.  Then when it came time to look at offers....wammo!  we got slammed.  Receiving 8 offers in a matter of minutes.  Our clients were very happy and we managed to sell this condo for the most money per square foot ever in this building!  Congrats to team member Jordan for his successful sale.  Keep it up!

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It's all in the details


When it comes to showcasing your home every detail has to be perfect.  Whether you are in Kitsilano, Point Grey or Mount Pleasant I leave nothing to chance.  Full colour 4 page feature sheets, notepads and pens to take notes as you tour the open house. 

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Yaletown sale with no competition!


 In this crazy hot Vancouver Real Estate Market, we were able to get my new client a great deal on this Beautiful Loft/condo Downtown. (933 Seymour) Specializing in Yaletown Market knowledge we knew if we went in strong and being the first offer, we wouldn’t have to compete with others. By using a knowledgeable Realtor, it goes to show there are still great deals out there! Proper strategy is key when buying or selling.



It's not all glitz & glamour


The Vancouver real estate market is not always as glamourus as people think.  Sometimes clients aren't ready for possession day.  Movers are delayed, packing didn't go as planned etc...  We have seen it all.  Our clients have even moved out forgetting to pack their entire roof top deck worth of furniture.  As luck would have it the key handover day is raining.  Our team rolled up their sleeves and started hauling furniture down 3 flights of stairs.  Soaked and covered in dirt we got it done.  No delay on key handover.  The Buyers and Sellers were both very happy.  

Sometimes the items that need moving are bigger.  For this we have a few strings to pull.  Cars and junk are just a few things that need dealing with last minute.  For this we make a few calls to make the problem go away.

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Sometimes that perfect shot requires a 30 foot tripod.  No problem, we have that too.  Our photographers use the best equipment to ensure we get the shots that make our listings stand out.  Drones, tripods, sunset photography and even night photos are all things we use on a regular basis.

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Is the market shifting?


Is the Vancouver Real Estate Market Shifting?

Are properties sitting in the market for a tad longer and selling for a tad less?? If you have been thinking of buying a home or selling a home in Vancouver, is it all about timing or location, location, location? Open houses are still experiencing a crazy number of potential buyers. Properties are still selling for the listing price and over asking...but if the home is not considered "A" lister based on location, more and more condos and detached homes are taking longer to sell. This is good news for buyers and greater news for sellers of perfect properties. Call us to find out where your home as well as your search for a home, fits in this market.

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